Recent layoffs in the Yakima Valley will have an effect on the economy, but exactly how much remains to be seen, local experts said.
The Employment Security Department and local workforce boards track job data in Central Washington. Last month, Del Monte Foods announced it was laying off 127 workers and closing its Toppenish facility. Roy Farms laid off 129 workers in Moxee. Skagit Horticulture closed in Mabton and laid off 55 workers, Thermoforming Systems moved its production and laid off 66 workers.
The Yakima School District announced plans Monday to lay off more than 100 people this fall because of budget and enrollment declines.
Local economists and experts are keeping an eye on the job market and the economy to see if the layoffs are a return to pre-COVID-19 economic patterns or a larger economic downturn.
The moves come after months of historically low jobless rates in Yakima County.
Unemployment increased to 9% in February in Yakima County.
The unemployment rate hit a historic low of 7.6% in February 2020 and, during 2022 and 2023, February unemployment decreased compared to January unemployment, according to a Employment Security Department report. This year, unemployment rose from 8.4% in January to 9% in February.
SouthCentral Workforce CEO Amy Martinez said the layoffs would not have been unusual in 2019, before the pandemic. SouthCentral Workforce responds when layoffs occur to help people access unemployment and other resources, like training or support in the job search.
Don Meseck, an economist for the Employment Security Department, reports on the economy across Central Washington.
The layoffs will have an effect, Meseck said, but it's still too early to tell what this means for the wider economy. Individual businesses make their own decisions based on their own circumstances. Data from the most recent layoffs won’t be analyzed for a couple of months, he said.
“It’s definitely significant, but it’s not overpowering,” he said. “It’s not a showstopper, but it’s relevant. We’ll really have to wait and see what it does in the next couple months with the other industries.”
Jonathan Smith, executive director of the Yakima County Development Association, communicates closely with local businesses and called the layoffs surprising.
There had been indications that Del Monte and Thermoforming Systems had been considering growth opportunities before corporate decisions resulted in local closures, Smith said.
YCDA is working with several potential employers who are interested in moving to the area. Smith added that laying off employees and moving out of facilities could create opportunities for new businesses to purchase the unused infrastructure and facilities or employ those workers.
Still, he said, that kind of employer turnover could take years. It is easier to keep businesses than attract new ones, particularly for local workers.
"It's not much consolation," Smith said, particularly when new job opportunities are further away. "That 'hey, there's a job opportunity in Sunnyside or Yakima,' When you live in Toppenish and work in Toppenish."
Eyes on specific industries
Meseck and Martinez both considered the layoffs in the context of their economic sectors.
Meseck looked at manufacturing, specifically for non-durable goods, like foods, beverages, food packaging and products and similar items.
The layoffs hit Del Monte and Thermoforming Systems, which are both technically manufacturers, he said. Manufacturing in Yakima County had not quite rebounded to 2019 levels, Meseck added, but there had been some growth in December, 2023, and January, 2024.
“Manufacturing is one of those industries that had not rebounded yet to 2019, to pre-pandemic levels,” Meseck said. “There is a lot of flux, especially in the food processing sector of manufacturing.”
In January, before the layoffs hit Yakima, Meseck said manufacturing had some of the highest job growth: Manufacturing employment had grown by more than 5% between early 2023 and 2024.
That's something Smith has noticed. The YCDA is in touch with businesses throughout the Yakima Valley, he said, learning about their needs and goals.
He said eight manufacturers and construction companies have contacted YCDA about adding workers or workspace to their operations in 2024. There have been struggles in the local economy, Smith added, as the apple industry suffered a difficult year.
"It's kind of a mixed bag because of the hit to the apple industry, that's being felt, but there are some who are focused on growth," he said.
Martinez noted shifts in agricultural market could make that and related industries volatile. Consumers have been moving away from craft beer and toward ciders, she said, hurting hop producers like Roy Farms.
Oversupplies in tree fruit, like apples or cherries, can drive down prices. The U.S. Department of Agriculture issued a disaster declaration after environmental and market conditions hit sweet cherry growers hard in 2023.
Martinez said agricultural jobs could be more competitive this year.
The bigger picture
Martinez pointed out that it hasn’t all been layoffs this year. Manzana Products announced a new apple processing facility in Sunnyside that will employ 150 workers by 2025.
“There’s still bright spots, but it’s just watching to see if this is a market trend or a downturn in the economy,” she said.
Smith was less optimistic about growth in the wake of the layoffs.
"To have jobs lost at the same time, it's one step forward, one step back. It's like we're treading water," he said.
Still, the job market could be more difficult for job hunters, Martinez added. More layoffs means more newly unemployed people applying for jobs.
“People are laying off, so the labor market is going to be tighter,” Martinez said. “We have 420 more people looking for work in the county, so it will be more competitive.”
Unemployment rates returned to pre-COVID levels in February, according to Meseck's report, around 9%. However, the labor market is not the same as it was pre-COVID; Meseck said it has shrunk as older workers retire.
The labor force has made incremental recoveries, according to Meseck's report, and increased between February 2023 and February 2024. The report also states, however, that the number of unemployed workers also rose, from 10,161 in February 2023 to 11,518 in February 2024.
More workers looking for jobs could benefit employers, who will have more applicants and, possibly, lower labor costs, but those will primarily be related to manufacturing and agricultural industries. Workers in those sectors tend to have low wages already.
Meseck said the Yakima County was still relatively stable. In January, he added, there were still more open jobs than job seekers.
“It’s still a really good time to be looking for a job,” he said. “But it’s not as good as it was a few years ago.”
(0) comments
Comments are now closed on this article.
Comments can only be made on article within the first 3 days of publication.